How to Explain Capitalism to Children
Capitalism is the economic backbone in many modern countries, including the United States, and its influences reach nearly every aspect of citizens' lives. The basic concepts of capitalism are easy enough to understand, but explaining them to children in a way that makes sense to them can be challenging. Fortunately, there are many tools to teach kids the basics of capitalism in fun ways that will help them retain the information, giving them a base of knowledge from which they can further interpret their experiences with capitalism in the real world.
1 Define capitalism in the simplest terms
Define capitalism in the simplest terms. Your definition should explain the basics of capitalism: that it is an economic system in which individuals or groups of individuals own the means of production, and that such factors as what people need and want, what products and services cost and how much money people have determine what products and services are popular. And you can explain that the people who make popular products or provide popular services can make a lot of money. You should word the definition in age-appropriate language so children will understand and will begin thinking about the rest of the lesson and activities in these terms.
2 Ask children
Ask children to think of real-life examples of capitalist concepts like competition, profit maximizing and private ownereship. These examples exist everywhere in the real world, so with a little prompting, most children should be able to recognize them once they understand what they are.
3 Use hands
Use hands-on activities to drive the point home. Popular board games like Monopoly work on basic capitalist principles: Own more property and make more money than other players, eventually driving your competition to bankruptcy. Computer games like Rollercoaster Tycoon introduce more complex capitalist principles for older kids by letting them run a simulated amusement park while trying to maximize profits and keep customers happy.
4 Compare capitalism to other theories of economics
Compare capitalism to other theories of economics. You will likely need to introduce the basics of economic systems in place in other countries to accurately compare them to capitalism. Be prepared to answer any questions your kids may have about capitalism or other economic systems. Encourage dialogue by answering their questions.